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gruffydd

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http://www.independent.co.uk/news/business...es-1752111.html

Extract:

The more I think about this extraordinary period, the more convinced I am that the great legacy will be the shift in economic authority away from Europe and North America and towards Asia and Africa. It is not just that they will recover more swiftly; their economic policies have been shown to be more effective. So there will be a numerical shift of power in the sense that China will pass Japan to become the world's second largest economy this year or next, rather earlier than projected. There is also an industrial shift of power taking place: in the first half of this year China produced more cars than the US for the first time. There is also a financial shift: one small measure of this is that the value of the shares on the Shanghai stock market has now passed the value on the Japanese market, to become the second largest after New York. More significant even than that is that our policies have failed and theirs seem to have succeeded.

Both our policies towards our banks and our fiscal policies have failed. As a result, we will spend the next decade patching the banks together and starting to correct the fiscal catastrophe we have, through out own stupidity, created. We have made big errors here in the UK, but so too have other governments in the US and Europe. China and India do not face such a handicap.

So other countries, trying to figure out who to copy when framing their own policies, won't look to us. Why should they? They will look to success, and who can blame them.

Edited by gruffydd

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Both our policies towards our banks and our fiscal policies have failed. As a result, we will spend the next decade patching the banks together and starting to correct the fiscal catastrophe we have, through out own stupidity, created. We have made big errors here in the UK, but so too have other governments in the US and Europe. China and India do not face such a handicap.

Actually, these policies have been wonderfully successful, in the sense that those who formulated them have done extremely well as a result.

Of course the rest of the population is screwed, but at least we are doing alright in the cricket :)

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Sucking exhaust fumes, eh?

china-pollution.jpg

http://www.independent.co.uk/news/business...es-1752111.html

Extract:

(snip)

So other countries, trying to figure out who to copy when framing their own policies, won't look to us. Why should they? They will look to success, and who can blame them.

I hope they will look at some new ideas instead of copying the failed strategies of the past.

Mercantilism (which amounts to protecting your own market while ruthlessly going after others) can't be a universal solution, it only works while others have the willingness and liquidity to engage in free trade. I'm yet to be persuaded that it even worked that well for China while the going was good ... first I want to see if the debt that stands as "payment" for the various sacrifices they've made is actually repaid, and if the infrastructure they're building doesn't turn out to be roads-to-nowhere in a post-peak-oil world. (Just as you can't borrow your way out of debt, you can't correct previous malinvestment by compounding it ... time will tell).

More generally, the author seems to think the worst is past, he also seems to think that GS made its recent profits through the skill of its economic team rather than its political capture of the levers of power. Finally he neglects the very idea of a bubble, assuming that high Chinese stock-market and house prices are a positive indicator. I wonder what he was writing about the UK economy, a couple of years ago?

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